NEW YORK (CNN/Money) - What are the pros and cons of leaving my 401(k) account with the company I retired from rather than rolling it over into an IRA?

-- John O'Brien, W. Keansburg, New Jersey

There's a classic Jack Benny routine in which a robber runs up to him, puts a gun in his face and says, "Your money or your life." Jack Benny just stands there, saying nothing. Agitated, the robber repeats, "C'mon, your money or your life, which will it be?" Jack Benny then looks at him and with that inimitable deadpan of his replies, "I'm thinking."

So what's this got to do with your 401(k)? Well, I'm thinking, and thinking, and thinking, but I can't come up with any compelling reasons why you should leave your 401(k) money with the company you've just retired from.

Oh, I suppose I could see keeping the money in your employer's 401(k) if you thought you might want to borrow from it. You see, once you roll the money into an IRA, you can no longer borrow money from the account. But that doesn't seem like a very good reason for someone who's just retired. You're much more likely to want to make withdrawals from the account than take loans against it.

IRAs also don't qualify for a complicated but possibly valuable tax break available to 401(k)s known as "forward averaging." But forward averaging only applies if you plan to pull all your money out of the 401(k) and pay taxes on it, rather than continue to let the account build without the drag of taxes. And not everyone qualifies for forward averaging. (For details on this technique, click here.)

And I guess I could see keeping your money in the 401(k) if your employer's roster of investment choices was so much more extensive than what you could find outside the company. Or even if that's not so, maybe you could make a case for leaving your money with your employer because the expenses on the funds in your employer's plan are so low that your cost of investing would jump significantly if you moved your money out of the plan.

But I seriously doubt that this is the case. Given the thousands of mutual funds and other options available from fund companies and investment firms these days, I can't imagine that you couldn't duplicate the choices within your employer's plan, or come pretty damn close. As for expenses, most employers aren't exactly killing themselves to keep 401(k) investing and administrative costs to a minimum. So I'd be surprised if you weren't able to do better outside your employer's plan.

One possible reason to stay would be if you planned on "annuitizing" some of your 401(k) money -- that is, converting a portion of your account balance to an income stream that would last as long as you (and, if you wish, your spouse) are alive. But relatively few employers offer this option with a 401(k). And even if your employer does offer it, you would probably be able to get as good or better a deal by buying an annuity from an insurance company.

Which leads me to conclude that you're probably better off transferring your 401(k) money to a rollover IRA. This will preserve the tax-deferred growth of your account, and likely give you access to an even broader range of investments: virtually all mutual funds, plus individual stocks and bonds. An IRA rollover can also give you more flexibility in estate planning since you can name any beneficiary you choose. Most 401(k) plans, by contrast, allow you to name only your spouse and, in some cases, your children.

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If you go the rollover route, be sure your former employer does a direct transfer to your rollover IRA -- a process known as a trustee to trustee exchange -- rather than giving the money directly to you. Otherwise, your old employer will be bound by federal law to withhold 20 percent of the balance for taxes. You'll eventually get that 20 percent back when you file your taxes the following year. But in the meantime you'll have to come up with that 20 percent to complete the rollover.

If you don't, the IRS will consider that amount a distribution, and you'll have to pay income taxes and (unless you're over 55) the 10 percent penalty on the amount withheld. (In lieu of sending your 401(k) balance directly to the firm handling your IRA rollover, some companies write a check payable to both you and the investment firm. That's fine, as long as there's no withholding, and as long as you actually deposit the check.)

One final thing: if you decide to go back to work, you may be able to transfer the money in your rollover IRA into your new employer's 401(k). Last summer's tax bill makes transfers between various types of tax-deferred accounts much easier than before, although your new employer's plan would have to accept such rollovers.

So unless you really like one of the few reasons I came up with for keeping your money put, I'd say it's time for you to shake, rattle and roll over that 401(k).

Walter Updegrave is the author of Investing for the Financially Challenged and can be seen regularly Monday mornings at 8:40 am on CNNfn.